Low level of jobless benefit filings signals job market’s firm footing
Print Edition
THE number of Americans filing for unemployment benefits unexpectedly held at lower levels last week, pointing to further momentum in the labor market after job growth surged in June.
Another report yesterday showed producer prices recorded their biggest gain in a year in June on rising costs for energy products and services. The data signaled economic strength that could allow the Federal Reserve to raise interest rates later this year.
Initial claims for state unemployment benefits were unchanged at a seasonally adjusted 254,000 for the week ended on Saturday, the Labor Department said. Claims are near the 43-year low of 248,000 touched in mid-April.
Economists polled by Reuters had forecast initial claims rising to 265,000 in the latest week. Claims have now been below 300,000, a level associated with a healthy labor market, for 71 consecutive weeks, the longest stretch since 1973.
The labor market is on a strong footing, with nonfarm payrolls having risen by a robust 287,000 jobs in June, which should underpin economic growth for the rest of the year.
In a second report, the Labor Department said its Producer Price Index for final demand rose 0.5 percent last month, the largest increase since May 2015, after advancing 0.4 percent in May.
In the 12 months through June, the PPI increased 0.3 percent, rising for the first time since December 2014, after slipping 0.1 percent in May.
Producer inflation is being boosted by the fading drag from a strong dollar and lower oil prices.
The dollar’s surge between June 2014 and December 2015 put downward pressure on producer prices, helping to keep inflation below the Fed’s 2 percent target.
The dollar’s rally appears to be over. The dollar has dipped on a trade-weighted basis this year while oil prices have rebounded from multi-year lows.
Last month, energy prices rose 4.1 percent after increasing 2.8 percent in May. Prices for services rose 0.4 percent after gaining 0.2 percent in May. Services were boosted by a surge in costs related to securities brokerage and dealing.
Health care costs were flat as a 0.1 percent rise in doctor visits was offset by weak home health care services.
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